Law firms in Australia are facing one of the most significant regulatory shifts in recent years: changes to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) that impact law firms go into effect in 2026.
Early preparation is critical to achieving compliance on time. By acting now, firms can also build a strategic advantage in client intake and onboarding, risk management and business growth.
Cindy Mundow, Practice Group Leader for Risk and Compliance at Intapp, outlined five practical steps law firms should take today to prepare for AML/CTF reforms.
1. Conduct a firmwide risk assessment
Every compliance journey begins with a comprehensive risk assessment.
Firms must:
- Identify high-risk practice groups, client types and industries
- Evaluate exposure to politically exposed persons (PEPs) and international clients
- Establish written policies and controls aligned with AUSTRAC’s regulatory expectations
This foundation allows firms to prioritise resources and develop a compliance framework suited to their operations.
2. Decide on your KYC approach early
One critical choice is whether Know Your Customer (KYC) checks will apply:
- Only to “designated services” under the AML/CTF Act
- To all clients (best practice)
Universal KYC avoids compliance gaps, simplifies cross-border regulation and strengthens due diligence. While it may require more effort upfront, it reduces long-term risk exposure.
3. Leverage technology to centralise and streamline
Manual checks and siloed processes increase both cost and risk. Firms should adopt a centralised compliance platform that integrates:
- Conflict checks
- KYC and sanctions screening
- Client intake and onboarding workflows
This not only supports compliance but also accelerates matter opening, transforming compliance from a burden into a competitive differentiator.
4. Prioritise training and education
Compliance isn’t just about systems — it’s about people. For smooth adoption, law firms should:
- Deliver training to lawyers, support staff and operations teams
- Update engagement letters, policies and client communication templates
- Educate clients on the “why” behind AML/CTF requirements to build cooperation
A well-trained team is the backbone of consistent compliance.
5. Tailor compliance to your firm’s risk appetite
While AUSTRAC sets the minimum compliance standards, every firm has unique considerations:
- Client base composition
- Industry focus (e.g., corporate, financial services, property)
- Risk tolerance and governance structure
By tailoring compliance programs to reflect their own risk appetite, firms ensure consistency, clarity and stronger protection against reputational damage.
Why acting early matters
The AML/CTF Act reforms are not just about survival. Law firms that prepare now will:
- Onboard clients faster with confidence
- Reduce regulatory risk
- Gain an advantage over competitors who delay compliance
Bottom line: Don’t wait for reforms to be enforced. By acting now, your firm can align compliance with business strategy — and thrive in the new regulatory landscape.